Before applying for a credit card, it's smart to shop around for the best one suited to fit your spending habits. Once you find one you like, whether it's a card with no annual fee or one that earns you cash back, your first step should be seeing if you're likely to qualify.
This is especially relevant in today's world as credit card issuers begin to tighten up lending for new and existing customers amid the economic fallout from the coronavirus pandemic.
Luckily, many of the major card issuers allow you to prequalify for some of their credit cards, which means you can check your odds of getting approved before actually applying. You may also be able to see your possible rates and terms as well.
Prequalifying, or preapproval (card issuers use these terms interchangeably), won't have any effect on your credit score— that happens once you formally apply. Keep in mind, however, that just because you've prequalified for a credit card, it doesn't guarantee approval when you submit your official application.
Below, CNBC Select explains why preapproval and prequalifications don't impact your credit score and where you can find these offers.
Why preapproval and prequalifications won't hurt your credit
Whether you've applied for prequalification through a card issuer's website or you received a prescreened offer in the mail stating that you have been selected to apply for a certain credit card, neither of these situations hurt your credit score. Issuers only do a soft inquiry, or "soft pull" of your credit report during the preapproval process. It's not a full look — just a glance to see if you seem like an ideal card member.
Once you apply for the card you want, the lender or issuer will have your permission to do ahard inquiry, or "hard pull" of your full credit report from one of thethree main credit bureaus(Experian, Equifax or TransUnion).
A hard inquiry can temporarily ding your credit score a few points, regardless of whether you're approved or denied for the credit card or loan. This is why it's recommended you only apply for a new credit product every six months or so. And if you do get denied, know there are many steps you can taketo improve your credit score.
Where can you find preapproval and prequalification offers?
You can find preapproval offers sent in the mail, and they usually come with a special code to apply.
The second place you can check for preapproval is by going to the card issuer's website. This is a huge advantage since it's easy, convenient and free. Most of the best rewards credit cards require at least good credit, so it's important you check your credit score when you start searching for a new card.
If you are looking to apply for a great credit card for groceries, you could check your approval odds for the Blue Cash Preferred® Card from American Express. Alternatively, you could aim to apply for a balance transfer card like theCiti Double Cash® Card (see rates and fees). Both cards require good or excellent credit, so if you have any doubts we recommend you check for preapproval first.
The major card issuers that allow you to see if you prequalify online include the ones below:
- American Express: Only requires that you enter your home address and the last four digits of your social security number. There is an option to include your income.
- Bank of America: You can receive customized credit card offers by entering your name, date of birth, the last four digits of your social security number, your address and the kind of credit card you are interested in, such as one to build or rebuild your credit.
- Capital One: Customers enter their name, date of birth, social security number, address and what card benefit is most important (cash back, low interest or not sure).
- Chase: Enter your name, address and last four digits of your social security number.
- Citibank: If responding to a mail offer, enter the special code. At this time, the issuer is not allowing new customers to check to see if they prequalify for a Citi card online, but you can view their credit card offerings here.
- Credit One:Requires you to provide your name, address, email, phone number, social security number, date of birth and monthly income.
- Discover:Enter your name, address, date of birth, social security number, your annual income, your monthly rent or housing payment, as well as other questions such as your housing status, whether you have a checking, debit, savings, IRA or money market account, if you are a student and the card benefit most important to you (such as cash back or travel rewards).
Don't miss: Prequalified vs preapproved: What you need to know about your approval chances for a credit card
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
FAQs
Preapproved and prequalified offers don't affect your credit score. Plus, you gain a better understanding of your chances at being approved for a credit card without a hard inquiry being applied. Credit card companies may extend unadvertised offers with better welcome bonuses or terms than those publicly available.
Does pre-approval affect credit score credit card? ›
A preapproval gives helps you gauge your likelihood of approval for new credit, and the interest rate you could receive. While a credit card preapproval doesn't affect your credit, a preapproval for a mortgage or car loan could cause a minor but temporary decrease in your credit score.
Does pre-approval mean you will get the card? ›
In summary. So, if you've been asking yourself, “what does pre-approved mean for a credit card?” know that you're not the only one. And while pre-approval offers don't guarantee approval, they can indicate that you have a higher chance of being approved once you finally apply for that card.
Which is better preapproval or prequalification? ›
While prequalification is a good first step, it typically won't carry as much weight as a preapproval because a lender hasn't verified your information. Going beyond prequalification and getting preapproved by a loan officer is a critical step that shows you're serious about buying a home.
Does prequalification pull credit score? ›
They are simply giving you an estimate of how much money you can borrow.” Technically, the lender's quick credit check is a “soft pull” of your credit history. Such soft inquiries don't show up on your credit report, so they won't affect your credit score.
Does pre-approval go on your credit score? ›
Here are a few ways getting pre-approved might impact your credit score: The date you've applied, the lender you've applied with and the amount of money you've applied to borrow will all be recorded on your credit report. Note that this doesn't make pre-approval inherently bad for your credit score.
Does preapproval for a car hurt your credit? ›
In most cases, an auto loan preapproval has the potential to impact your credit. For example, if you go through the preapproval process with the lender and submit all of your information and documentation, the application will typically result in a hard inquiry, which can temporarily impact your credit score.
Is prequalified and preapproved the same thing with credit cards? ›
With credit cards, “pre-approved” and “pre-qualified” may be more likely to be used interchangeably than with loans. But some credit card issuers might have different criteria for the two. Further, pre-approved offers may be stronger indicators of approval.
Is there a downside to getting preapproved? ›
Mortgage pre-approvals can drop your credit score by a few points because they involve the lender making a hard inquiry on your credit report. However, pre-approvals are an important part of the home-buying process, so you shouldn't let that stop you from getting one.
How long does prequalification last? ›
Most lenders will provide a mortgage preapproval letter that expires within 60 to 90 days. Not only can interest rates change during the preapproval window, but so can your financial situation. Either can affect your maximum borrowing potential, which is why lenders don't want to take on the risk beyond 90 days.
Credit card pre-approval doesn't typically impact your credit scores because the process usually involves a soft inquiry.
What are the benefits of prequalification? ›
Pre-qualifying helps you get real about budget.
A pre-qualified mortgage typically provides a ballpark estimate of how much money you can borrow, breaking down what your monthly mortgage payments would be.
Can you be denied after prequalification? ›
However, even though prospective homebuyers get pre-approved for a mortgage before shopping for homes, there's no 100% guarantee they'll successfully get financing. Mortgages can get denied and real estate deals can fall apart — even after the buyer is pre-approved.
How many points does a pre-approval affect credit score? ›
“The typical credit score drop is less than 5 points for an experienced borrower with an average credit history,” said Dan Green, CEO of Homebuyer.com. A first-time homebuyer could experience as much as a 10-point drop, he said, but the tradeoff is an accurate picture of your potential home loan.
What happens if my credit score drops after pre-approval? ›
The small credit score change after pre-approval won't cause the lender to change their mind when it comes time to apply for a mortgage. The drop is temporary. If you continue to pay your bills on time and are punctual with your mortgage payments once you receive one, your credit score will soon recover.
Can I be denied credit card after pre-approval? ›
It's important to understand that even if you've been pre-approved, you're not guaranteed to be approved once you complete an official application. For example, depending on whether the information in your credit report changed from the time you were pre-approved, you may be denied for a pre-approved offer.
Does accepting a pre-approved credit limit affect credit score? ›
Because pre-approvals are soft checks, they have no effect on your credit score. Only you will be able to see them on your credit report.
